Kalibri Labs forecasts a lodging recovery slowdown for the rest of 2021

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Hotel front desk [Credit: dotshock/Shutterstock.com]
Hotel demand dropped off in July compared with June. Photo Credit: dotshock/Shutterstock

Citing sluggish group and business demand, weakening leisure demand and the spread of the Covid-19 delta variant, Kalibri Labs now projects a recovery slowdown for the remainder of 2021. 

Both airline bookings and hotel demand dropped off in July compared with June, according to Kalibri's "Mind the Gap" report, and the company anticipates this will continue after schools return to in-classroom learning.

Although demand and average daily rates in September and the fourth quarter historically have been characterized by strong group and business travel, most large groups won't return in a meaningful way until 2022, resulting in occupancy and rate pressure on large city hotels, according to Kalibri. Further, the resurgence of Covid-19 cases is likely to delay many companies' plans to return employees to the office. 

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While leisure demand has approached or exceeded 2019 levels in recent months, "commercial demand is not only well below pre-pandemic levels, but has only recovered to about 80% of 2015 levels," Kalibri said.

Not surprisingly, weekend demand has been a driving force in the recovery, representing leisure travelers. This trend, however, moderated in July when weekend room night demand dipped from June to July. Other than December 2020, this was the first time since May 2020 that weekend room night demand did not outperform shoulder days (Thursday and Sunday) or weekdays. 

Still, for July, hotels reported Saturday had the strongest ADR change compared with 2019, followed by Friday, then Sunday. Wednesday continued to be the weakest day of the week from a recovery standpoint.

Source: Business Travel News

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